The club was required to meet contractual economic conditions by 30 April 2016 in order to be allowed to join the KHL.[2] According to Roman Rotenberg, HC Kunlun Red Star applied to fulfill its obligations, but there was a coherent number of formalities for the final decision about team to be taken by June 2016.[6] In early May, the KHL president Dmitry Chernyshenko considered the affiliation of the club to the league as an already done deal: "The club has provided all the documents on the scene, the structure of the club, finance, and they have the permission of the Chinese Ice Hockey Association."[7]

It was announced on 25 June 2016 that the KHL board of directors had officially accepted the club's application and that they would be participating in the upcoming 2016–17 KHL season.[3] The Beijing announcement ceremony included Russian President Vladimir Putin and his Chinese counterpart Xi Jinping.[4]

Home games were set to be played at the LeSports Center in Beijing and at the Sports Center Pavilion in Shanghai.[8] In November 2016, it was reported the team was playing its games at the Feiyang Skating Center in Shanghai as the Beijing faciity was booked full with concerts and basketball games, though plans were to return to Beijing in December.[4]

On 24 July 2016, the team played its first pre-season game, in which it was defeated 2–0 by Traktor Chelyabinsk.[9]

In a later exhibition match, on 8 August 2016 against Barys Astana, a fight broke out minutes into the game when defenceman Damir Ryspayev punched Kunlun forward Tomáš Marcinko in the face, then attacked three other Kunlun players before trying to jump into the Red Star bench. The attack appeared to be retaliation for a Kunlun hit in an earlier game that had left Barys forward Dustin Boyd with a broken leg. Officials cancelled the game, and Ryspayev was suspended and eventually given a lifetime ban from the KHL.[4]

The Kunlun Red Star won its regular season KHL debut against Amur Khabarovsk by a score of 2–1.[10] The first goal in franchise history was scored by Sean Collins at 14:00 of the first period.[4] The team also won its second game, a home game in front of a crowd of 7,832 people, defeating Admiral Vladivostok by a final of 6–3.[11]

On 27 October 2016, Chinese-Canadian defenceman Zach Yuen, a Vancouver-born draft pick of the Winnipeg Jets, became the first player of Chinese descent to score in a league game, in a 1–0 win over Khabarovsk. There were also four Chinese-born players on the team. KHL roster guidelines required that Red Star has any combination of at least 10 Russian and Chinese players.[4]

After the team's first home game in Beijing, the team had to play its home games during the fall in Shanghai, as the arena in Beijing was not available. However, the interest in Shanghai for games was poor; average attendance was only 1,100 for the first 14 games in Shanghai. The team returned to Beijing in mid-December.[12] After returning to Beijing, attendance improved and the team began attracting crowds of around 7,500, comparable with the more established KHL teams.[13] Red Star finished the season with an average attendance of 2,952, the highest of any team in Asia. Games in Shanghai averaged 1,280, while their matches in Beijing saw an average of 5,137 spectators.[14]

Kunlun Red Star qualified for the 2017 KHL postseason and faced the defending Gagarin Cup champions Metallurg Magnitogorsk in the conference quarterfinals.[15] Defenceman Tuukka Mäntylä scored the first two playoff goals in the Beijing club's history in a 4–2 loss to Metallurg.[16]